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California plans major carbon cut in its gasoline

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"The impact of this policy on consumers and the economy will likely be positive," says James Winebrake, chairman of the Public Policy Program at the Rochester Institute of Technology (RIT) in New York. "Although these low-carbon fuels may cost a bit more than conventional fuels, they may have a greater domestic content.... Therefore, money spent on low-carbon fuels is less likely to end up overseas and more likely to generate greater economic activity locally. This could have significant benefits to state and regional economies."

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Schwarzenegger's announcement included appearances by environmental leaders, scholars, and energy and transportation consultants – all generally supportive of his plan.

Industry's view

Conspicuously absent were representatives of oil producers and carmakers. Conoco Phillips, in a written statement, said it "is supportive of and invests in technology development to produce and enable the use of low-carbon fuels and recognizes this [plan] is one component in a suite of actions necessary to reduce CO2 in the atmosphere."

BMW spokesman Andreas Klugesheid, reached at the auto show in Detroit, says his company is pushing a hydrogen car "whose emission pipe will eventually emit nothing but water vapor.

"We understand the limitation of fossil fuels is basically something that, in the long run, endangers our business.... We share the governor's approach to reduce CO2."

Some observers say oil and car companies will eventually warm to the idea of alternative fuels.

"Oil and car companies generally don't like to be told what to do, so their knee-jerk reaction is not to like it," says Dan Sperling of the Institute for Transportation at the University of California at Davis. "Once they look at this, they will think it is palatable because it gives them a lot of flexibility and comes with a market-based approach. No one of them will be at a disadvantage."

Others, such as RIT's Mr. Winebrake, say the question remains whether the action is "too little, too late."

And environmentalists worry that the state's rule on fuel content may not prevent ways of creating alternative fuels that are themselves polluting. Some ethanol plants in Texas, for instance, burn coal – a big carbon source – in the distilling process, says Sara Hessenflow Harper of the Natural Resources Defense Council (NRDC). Some methods of growing and harvesting corn for ethanol can be far more polluting than others, environmentalists note.

Supporters and detractors of the new standards agree that the rulemaking and implementation phases are complex – and fraught with political and economic pitfalls.

"In general, we are very excited about the prospect of simultaneously transforming the whole energy economy, lessening dependence on foreign oil, and reducing global warming all at once," says NRDC's Jennifer Witherspoon. "We just hope they don't inadvertently overlook any of the great solutions that are out there."